Take the chartered accountant's right to advertise. Advertising, is regulated by the code of conduct of the Institute of Chartered Accountants of India (ICAI) and the Chartered Accountants Act, 1949.
Given the stipulations that govern the profession as far as conduct goes, breach is construed as professional misconduct, and the ICAI can take disciplinary action.
But given today's changing scenario, the ICAI has been overly conservative on such issues and has pronounced as professional misconduct acts that to the ordinary observer would appear remotely connected with the restrictions.
This is not to say that the ICAI does not permit advertising. A firm can advertise changes in or dissolution of partnership; recruitment of staff for the firm itself or for clients; and sale of business or property in its professional capacity as trustee, liquidator or receiver. And mercifully, chartered accountants are allowed to provide information about their services to clients or potential clients on request.
But this limited allowance is in stark contrast to international regulations. Practising accountants abroad would be free to advertise their services provided they maintained the dignity of the profession, and the advertising, publicity or promotional material was not false, misleading or deceptive.
No one has made out a case yet showing that the professional or ethical standards of accountants abroad have declined because of the freedom to advertise and solicit work. In fact, the professional bodies are known to actively advertise their own functioning and also that of their members.
With growing foreign investment in India, various transnationals including large accounting firms, have set up shop here. Typically, these firms are structured as private limited companies and provide diverse consulting services in direct competition with members of the ICAI. Significantly, many chartered accountants have also formed companies so that they are able to circumvent the restrictions on advertising, publicity and solicitation of work and provide consultancy services.
These companies, though unable to do accounting, auditing, and tax jobs, provide a wide range of services including management, strategy, and infotech consultancy. The point is, these services are also provided by members of the ICAI. But the companies are free to adverise, publicise, and solicit work in almost any manner. There are numerous instances of such companies advertising or even sponsoring entertainment events. Besides advertising, these companies are using aggressive marketing strategies with the result that many a chartered accountant is losing out on opportunities to provide quality services aligned with the requirements of India's business environment. Many chartered accountant firms in India can rightly claim parity with or even superiority over these companies in their entire sphere of work. However, in the absence of the privilege to advertise or solicit work, the firms have remained small and are relatively unknown.
It is not as if advertising of business cannot be done in a dignified manner, and the plea is for such a practice. Denigrating the work of other chartered accountants is an example of a practice that should not be permitted. Significantly, in the US and the UK, the argument that weighed heavily in favour of the regulations being relaxed was that in allowing advertising, a step would be taken against monopoly and restrictive trade practice. It would be more than welcome that in framing regulations in India, that the business conditions peculiar to the country and ICAI's disciplinary mechanism could be ensured in a more balanced manner.
